Less Gov’t and Taxes now!

An article in the CSM points to the failures of the Conservative Revolution to tame the Redistributionist Left.
Though we have achieved much, we have not done enough to tame the spending and taxing beast.
We need to act now!

Even with Republicans in control, trends are decidedly in favor of massive redistribution of wealth.
By Patrick Chisholm | csmonitor.com

The political left in America is emerging victorious.

No, this isn’t about the damage that Jack Abramoff’s mischief has done to the political right. Nor is it about President Bush’s lousy poll numbers. And it doesn’t refer to Democrats’ recent win of two governorships.

It’s about something much deeper; namely, that the era of big government is far from over. Trends are decidedly in favor of that quintessential leftist goal: massive redistribution of wealth.

Republicans’ capture of both Congress and the White House was, understandably, a demoralizing blow to the left. But the latter can take solace that "Republican" is no longer synonymous with spending restraint, free markets, and other ideals of the political right.

While the left did not get its way on tax cuts, this may be only a temporary defeat: Freewheeling spending has made future tax cuts politically a lot harder.

During the first five years of President Bush’s presidency, nondefense discretionary spending (i.e., spending decided on an annual basis) rose 27.9 percent, far more than the 1.9 percent growth during President Clinton’s first five years, according to the libertarian Reason Foundation. And according to Citizens Against Government Waste, the number of congressional "pork barrel" projects under Republican leadership during fiscal 2005 was 13,997, more than 10 times that of 1994.

Discretionary spending is dwarfed by mandatory spending – spending that cannot be changed without changing the laws. Shifting demographics combined with an inability to change those laws virtually ensures that, through programs such as Social Security and Medicare, America’s workers will be forced to redistribute a larger and larger portion of their income to other Americans in the coming decades.

The near impossibility of changing the system was evident in the recent effort to convert Social Security from a spending program to a savings program. It hardly stood a chance against the powerful senior citizens’ lobby and other left-leaning groups, and their allies in Congress on both sides of the political aisle.

Time is on the side of the left. As politically difficult as it is now to reform of Social Security or Medicare, as the years pass it will get even more difficult. The swelling number of retirees will further strengthen the senior lobby. And as Social Security’s surplus evaporates, there will be less money available with which to establish personal savings accounts.

The prescription drug benefit was another victory for the redistributionists. While it is true that the left wants even more spent on that program, Republican efforts have netted an additional $1.2 trillion being redistributed over the next 10 years.

Certain trends have been favoring the left for the past several decades. In the early 1960s, transfer payments (entitlements and welfare) constituted less than a third of the federal government’s budget. Now they constitute almost 60 percent of the budget, or about $1.4 trillion per year. Measured according to this, the US government’s main function now is redistribution: taking money from one segment of the population and giving it to another segment. In a few decades, transfer payments are expected to make up more than 75 percent of federal government spending.

Currently the federal government consumes about 20 percent of the GDP, which is another way of saying that about 20 percent of Americans’ income, on average, is paid in taxes to the federal government. According to the Government Accountability Office, that is on course to rise to 30 percent by 2040. Most of that 30 percent would be redistributed as payments to other Americans, rather than spent on standard government services like law enforcement, transportation, defense, national parks, orspace exploration.

While foreign policy has taken a rightward turn since Sept. 11, 2001, it, too, could drift leftward in coming decades. As the government allocates more of its budget to entitlements, there will be less money available to spend on the military, embassies, aid agencies, and other apparatuses that enable us to wield outsized influence in world affairs. We are on track to become more like the welfare states of Europe and Canada, where entitlement spending leaves limited funds available for bold foreign policy initiatives.

The left should be pleased that defense spending as a percentage of the federal budget has steadily declined during the past decades. In the early 1960s the Department of Defense constituted 45 percent of federal spending, whereas this year it will constitute an estimated 17 percent, according to the Office of Management and Budget. At the same time that percentage shrank, the percentage devoted to entitlements rose. This is reflected in money allocated to the Department of Health and Human Services: It skyrocketed from just over 3 percent of federal expenditures four decades ago to an estimated 25 percent this year. With the impending retirement of the baby-boom generation in addition to the new prescription drug plan, this crowding-out of defense and other government programs, such as homeland security, will accelerate.

The left has a powerful institutional force on its side: "public choice" economics. Our system of government is highly responsive to vocal groups that lobby for subsidies, government programs, and other special favors. Since the costs are spread out among all taxpayers while the benefits are concentrated among smaller segments of the population (such as retirees, in the case of Social Security and Medicare), the taxpayers have much less of an incentive to lobby against the measure while the beneficiaries have a huge incentive to lobby for it. Whenever those subsidies are threatened, the lobbies launch their barrages of politically effective complaints.

Forces favoring the left are virtually locked in. Even with Republicans in control, big government is destined to get a lot bigger.